Tuesday, March 24, 2015

Local Wentworth and Dearne MP, John Healey has asked for a meeting with Tata Steel's chairman and called on him to rethink plans to close the British Steel Pension Scheme (BSPS).

Earlier this month, unions warned of industrial action after senior managers from Tata Steel announced their intention to close the BSPS to future accrual, adding that they "have lost all faith in the company and its leadership."

John Healey is a member of the All-Party Parliamentary Group for steel and his constituency includes the company's Aldwarke plant. Over 2,000 people are employed by the company in South Yorkshire where sites focus on exceptional high-value products and sectors.

The MP has written to Cyrus Mistry, Tata's chairman, calling on him to meet MPs concerned about the "crisis" at the company.

He said in the letter: "I worked very closely with both management and unions in engineering steels when the global financial collapse and recession hit in 2007/08, and I saw the plant pull through an extremely difficult time when its very existence was threatened. I do not therefore now use the term "crisis" lightly.

"I have been consistently impressed by the approach the workforce and union leaders at our local plant have taken to playing a very full part in working with the management to see the company through the recent tough years."

Mr Healey (pictured, right) said the announcement about the pension scheme was "a very bitter blow to the workforce that have been so committed to the company and so loyal."

Trade unions have said they were willing to meet the deficit through reductions in members' benefits – even though the company is legally obliged to pay for the deficit and has done so in the past.

Tata Steel will began a statutory 60-day consultation about the changes yesterday and the company is proposing closure of the scheme on April 1 2016.

With the prospect of no new members joining or any further benefits or entitlements being built up under the scheme, steelworkers may now choose to strike for the first time in more than 30 years.

The Wentworth & Dearne MP added that UK steelworkers "deserve and expected better" from management, and he urged the chairman to personally review the approach and intervene.

In October 2014, Indian-owned Tata Steel Europe refinanced its bank debt through term loan and revolving credit facilities of €3.05 billion as it tackled the existing debt of the operations it bought for around $10 billion in 2007 when it was know as Corus. At the time it was said that the outcome was achieved to assist the company with no detriment to the pension scheme's security position.

The Tata company funded its acquisition of Corus in significant part by debt, raised both in India and overseas, and as a result Tata had sizeable repayment and debt servicing obligations on an ongoing basis.